How to Refinance a Car Loan

Refinance

 

Do you want to lower your interest rate and save money on your monthly car payment in Florence, SC or Warner Robins, GA? Well, refinancing your car loan could well serve you and your budget. At Five Star Automotive Group, we go over what to know when refinancing your car and whether it’s the right decision for you. Keep reading and learn the best way to refinance auto loans today! 

 

 

How Do You Refinance a Car Loan?

When it comes to refinancing, the ultimate goal is to lower the interest rate you are being charged each month. The first thing you need to know is what you are currently paying. Take a look at your documents or contact your lender to confirm your current interest rate and monthly payments. After you’ve gathered that information, here’s what to know when refinancing your car:

  • Check Your Credit Score: If you are routinely paying your bills on time from the time your vehicle was purchased, then it’s very likely that your credit score has improved, and you could benefit from refinancing. 
  • Start Applying: Take the time to apply to several automotive refinance companies to ensure you get the best rate. Make sure you submit all applications within a 14-day period to reduce the negative impact on your credit score.
  • Evaluate Offers: Take time to properly evaluate the numbers you get back from companies to make sure any new offers coming back will get you the monthly payment you are looking for. You can utilize our online monthly payment calculator to help you compare offers. 
  • Decide Loan Term: Choose whether a longer or shorter term loan is a better fit for your situation. Keeping in mind that a shorter term loan will require larger monthly payments, but you will pay less interest in total. Meanwhile, on a longer-term loan, your monthly payments will be smaller, but you will pay more in interest in the end. 

Best Way to Refinance Auto Loan

After exploring what to know when refinancing your car, there are a few other things to keep in mind to determine the best way to refinance auto loans according to your lifestyle and financial situation:

  • Underwater Finances: If you owe much more than your vehicle’s currently worth, it can be harder to get approved for refinancing. 
  • Older Vehicles: Many lenders won’t refinance an older car that has already experienced major depreciation. 
  • Fees: You will want to check your original car loan to make sure there aren’t any fees associated with paying it off early. If there are, refinancing may not be cost-effective. 

If you are in any of these financial situations, be sure to contact a Five Star Automotive Group finance center. You can get guidance and advice from our financial experts to make the most out of your situation.

Explore the Financing Process a Five Star Automotive Group Dealer Near You 

If you need any help when you find yourself asking, “How do you refinance a car loan?” you can trust the team at a Five Star Automotive Group dealership to take care of you. Feel free to contact us today to find the dealership nearest you today! We have dozens of locations throughout Indiana, Ohio, Tennessee, South Carolina, Alabama, and Georgia! 

 

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